Philadelphia's mayor announced on Tuesday that the city's Wi-Fi network, previously scheduled to be shut down by its builder, EarthLink, has been saved by a group of private investors.

The investors will finish building the network throughout the city and plan to work with nonprofit organizations including Wireless Philadelphia to offer services to people who don't have Internet access. The new company plans to contract with several enterprise and municipal customers as anchor users of a paid service and offer free services to the general public.

The group has modeled its idea on other successful municipal Wi-Fi ventures, said Craig Settles, an independent consultant who has been in close contact with people involved with the new arrangement. In Fredericton, New Brunswick, Canada, for example, the network provider partnered with 12 businesses to commission the network. The business users pay for access while citizens can use the network for free.

Philadelphia's medical community and universities are obvious possibilities for anchor customers in addition to city organizations, Settles said.

"Despite all that has gone on with Philly and their network, I still expect the city to join the ranks of successful muni network projects," he said.

The investor group also plans to use advertising to help support the free service, according to a statement from the city. In addition, the group also expects to offer wired service to its customers.

Mark Rupp, Rick Rasansky and Derek Pew are three founders of the investor group. Pew and Rupp are on the board of Remi Communications, a provider of communications services to enterprises. In a statement, Pew said that the new company hopes to offer a range of wired and wireless services throughout Philadelphia and also to other metropolitan markets.

Philadelphia's municipal Wi-Fi network is notable because it was one of the first announced, and it once was expected to be the nation's largest municipal Wi-Fi network. But the plan drew fire from Verizon, which charged that it was unfair to use tax dollars to build a network that would compete with private providers. (See story on the background of the project from its inception.)

Eventually, EarthLink won a contract to build a network at no cost to taxpayers. But then EarthLink ran into financial difficulties and dramatically scaled back its Wi-Fi projects. Just last month, EarthLink announced it would shut down the Philadelphia network that it had already built after failing to come to an agreement with city and nonprofit groups that had hoped to keep the network running.

The history of municipal Wi-Fi networks across the country has followed a similar course of highs and lows. Excitement around the concept of municipal Wi-Fi led to a rash of cities announcing plans to build the networks, often with shaky plans for funding operations. Some cities have since shut down their plans. Others, like Philadelphia, continue to work on new business models that could support municipal Wi-Fi networks that include some free services for citizens.